Correlation Between VICI Properties and EPR Properties

Can any of the company-specific risk be diversified away by investing in both VICI Properties and EPR Properties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VICI Properties and EPR Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VICI Properties and EPR Properties, you can compare the effects of market volatilities on VICI Properties and EPR Properties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VICI Properties with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and EPR Properties.

Diversification Opportunities for VICI Properties and EPR Properties

0.92

Correlation Coefficient

VICI Properties  EPR Properties

Almost no diversification

The 3 months correlation between VICI and EPR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties and VICI Properties is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VICI Properties are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of VICI Properties i.e., VICI Properties and EPR Properties go up and down completely randomly.

Pair Corralation between VICI Properties and EPR Properties

Given the investment horizon of 90 days VICI Properties is expected to generate 1.52 times less return on investment than EPR Properties. In addition to that, VICI Properties is 1.03 times more volatile than EPR Properties. It trades about 0.15 of its total potential returns per unit of risk. EPR Properties is currently generating about 0.23 per unit of volatility. If you would invest  4,336  in EPR Properties on December 26, 2024 and sell it today you would earn a total of  775.00  from holding EPR Properties or generate 17.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

VICI Properties  vs.  EPR Properties

VICI Properties

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VICI Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, VICI Properties may actually be approaching a critical reversion point that can send shares even higher in April 2025.

EPR Properties

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EPR Properties are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EPR Properties reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VICI Properties and EPR Properties

The main advantage of trading using opposite VICI Properties and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, EPR Properties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EPR Properties will offset losses from the drop in EPR Properties' long position.

The idea behind VICI Properties and EPR Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.